Fleming seeks Cologne Re report

The chairman of the Oireachtas finance committee wants the financial regulator to explain to him the nature of its inquiries into an IFSC-based company which is at the centre of a international investigation into the reinsurance industry.

Fianna Fail TD Seán Fleming said he was planning to ask about the inquiries into the reinsurance company Cologne Re at a scheduled meeting in a fortnight's time with Ifsra chairman Brian Patterson and its chief executive Liam O'Reilly.

Mr Fleming said the only information he had to hand was gleaned from media reports about the company and its affiliate General Re, whose Dublin-based "alternative solutions group" has been under scrutiny by US and Australian regulators for some time.

These regulators have linked reinsurance transactions booked in Dublin with the collapse in 2001 of Australia's second-largest insurer and with a questionable contract for $500 million (€389 million) that has led to the departure from the AIG insurance giant of its chief executive for 40 years, Maurice "Hank" Greenberg.

The transactions in question had the effect of negating the element of risk in the insurance contracts, meaning that they should have been treated as loans.

"I have a meeting with the chairman and the chief executive of Ifsra. I'll be raising it with them to seek further information," said Mr Fleming, who is chairman of the Joint Oireachtas Committee on Finance and the Public Service.

"I'll be looking for further details and information and an update on the position from their point of view."

Ifsra has revealed only scant details about its inquiries, which began before Australian regulators moved last October to bar two high-level Cologne Re executives from working at director or senior-manager level in the Australian industry.

While news of Ifsra's interest in the company emerged in public only after US regulators revealed that they were examining some of its affairs, Mr O'Reilly will tell a conference in Dublin tomorrow that recent revelations about activities in the reinsurance industry are a matter of "deep concern" to the regulator.

According to speech excerpts, Mr O'Reilly will tell the Finance Dublin conference that there is no tolerance in this jurisdiction for transactions that have the effect of "deliberately obscuring the transfer of risk".

Stating that such transactions are unacceptable, he will say that Ifsra prides itself on matching best international practice in all aspects of financial regulation and expects all companies in its remit to comply with best international practice.

Meanwhile, New York Attorney General Eliot Spitzer said yesterday he expected to reach a "civil resolution" with AIG. Mr Spitzer's statement indicated that criminal charges will not be brought against AIG, relieving investors. "The board and current management of the company are now co-operating with this investigation," Mr Spitzer said in a statement.